Before I start considering recommendations, first I want to take a look at the chief objection that has been made by landlords to this series – the necessity to do anything at all.
“There is no problem”
However although many, probably a majority of landlords are decent and honourable and provide quality properties, there are many who do not.
At present these landlords are ‘getting away with it’. Do we want to live in a society where bad and often criminal landlords are allowed to rent out substandard and often dangerous property with impunity?
“We already have laws for these sorts of things’”
Why, people demand, do we need anything else?
The answer is that it is often difficult if not impossible to enforce them.
The Police generally refuse to have anything to do with housing issues, despite the fact that unlawful eviction (for example) is a criminal offence.
The people generally charged with the task of enforcing the regulations are local authorities. However it is very difficult for them to do this properly:
- A criminal prosecution needs to be proved beyond reasonable doubt
- This is difficult to do if the main witnesses (the tenants) are too scared to give evidence in court
- Even if they are prepared to do this, you need a lot of very clear evidence to prove your case, and
- As trials generally do not take place for many months, many witnesses will have moved on and / or will find it difficult to remember the events clearly
- Local authority officers are over worked and there are not many of them. It is, practically, very difficult for them to find the time to bring prosecutions, particularly as many of them have not had proper legal training, and
- When a case DOES succeed at trial, the penalties handed down by Judges are fairly derisory
So at present, the system is not working. Also, I have to say that I am not sure this is the correct system to deal with the problem of bad landlords.
Why local authority prosecutions are not the answer
For the problem to be resolved by local authority prosecutions the following would have to happen:
- There would have to be a massive increase in local authority housing staff
- They would all have to be properly trained in housing law and the law of evidence
- Ideally cases would need to come to trial sooner
- There would have to be some sort of protection scheme for witnesses
- The penalties for housing relating offences would need to be changed to make them more of a deterrent.
Doing this would be hugely expensive and would increase the council tax bills for everyone.
I don’t think this is an option, do you?
This is why local authorities are coming round to the view that it is better for the landlord to be compelled to undergo training and comply with the proper standards before being allowed to rent out a property at all.
That way it is more objective, and landlords are unable to ‘get away with it’ by terrorising tenants so they refuse to give evidence.
“Regulation will only increase rents for tenants”
This may be true but I don’t think it is the whole truth.
Yes, it will be an extra expense, but if, say, the registration fee is £500 this equates to about £40 per month. That is not a huge amount and I think most landlords could afford it. It will be a business expense and they will be able to offset it against their tax. However the fee may be a lot less than that.
The real objections?
I suspect that the real (and understandable) reason why landlords don’t want regulation, is because they see it as taking away the freedom they have had up to now to do as they like.
They are worried that they are going to be ordered to do a lot of ‘unnecessary’ and expensive work to their properties by ‘landlord bashing’ local authority officials.
The answer to this is for the landlord associations to work with local authorities and the government in setting the standards, and to assist landlords challenge unfair decisions to the Residential Property Tribunal (which will almost certainly be the body for appeals, rather than the courts).
There is no perfect answer to the problem of bad landlords and whatever solution is decided on someone will object to it.
But personally I think a system of landlord registration is more likely to deal with the problem of bad landlords than the current system of leaving it to local authorities to bring prosecutions.
And I think, in view of the increase and projected increases in the private rented sector, the problem of bad landlords is something which needs to be tackled.
“Tenants don’t want longer fixed terms”
This is true of many tenants, but by no means all.
However under the current system, landlords get no advantage and may (if they are unlucky enough to get a bad tenant) be under a considerable disadvantage, if they grant a long fixed term.
It is also very much in the interests of letting agents to retain the current system, as their income is largely derived from finding new tenants and charging for ‘renewals’.
But is it good for society as a whole?
I’ll sum up my recommendations next week.
I would another couple of points to your list of what makes prosecutions impractical, actions of tenants in disputes.
The legal dictum “He who comes to equity must come with clean hands” is very apposite. Many react badly to harassment and will often put TROs in a position where you know if you take into court the judge is going to decide it’s six of one half a dozen of the other.
Secondly you have the situation where tenants, not unreasonably dont want to return to the property or defend it because they are scared. I can and do get several injunctions a month for people but they never jump at the chance, they all come in saying they would rather move somewhere else.
If the problem is the landlord repeatedly letting themselves in without permission (one of the commonest complaints I get) then who wants to live on tenterhooks all the time? Even if they have changed the locks they dont want an angry landlord knocking on their door.
For years I was against licensing for many of the reasons that landlords raise but I am in favour of it now as I’m seeing an increase in complaints and incidents and feel powerless to deal with it using existing legislation. I know introducing licensing will anger some and cause other problems but being able to take a criminal landlord off the board is becoming a far more pressing imperative.
Even if you manage to prosecute a landlord they can still leave the court and carry on letting. A licence, like ones we have for driving where points are piled up for breaches and then loss of licence at 12 points would be perfect and good landlords would obviously have nothing to fear from it.
There is a big difference between ‘regulation’, ‘licensing’, and ‘registration’ but whatever happens (if anything), it should be on a nationwide scale and be adminsitered centrally for economies of scale. The last thing we need is more piecemeal, disjointed, local authority accreditation schemes.
Oh I agree. The welsh model proposes a national standard that is simply administered locally…..stop laughing at the back.
Ben,
I would be interested to know the reasons that LL entering without permission give. Are they after unpaid rent or just nosey?
Dave
Once councils have a foot in the door, what will stop them just increasing the fees and imposing ever harder requirements? (Anyone who has dealt with a Building Control or Conservation Department will understand this fear)
The risk of ignoring registration will prove more worthwhile the harder and more expensive compliance becomes. If it must happen it should be run nationally not locally. However the coalition decided registration was not needed.
@Daveg A variety of reasons, including nosey-ness but mainly it seems to be driven by the idea that it is their house so they can do what they like. Of course not all landlords do this but it is one of the most common complaints I receive. I have a case at the moment where the landlords havent had their post re-directed and let themselves in every couple of days to pick up. Recently they walked in while the tenant was sitting on the toilet with the door open. Low level stuff in a sense but they wouldnt listen to reason, insisting they werent harassing the tenant and that it was their right. I had to get an injunction against them to keep them out which they say they are now going to complain about because it is unfair on them.
@John I agree John, councils will charge for it because they have to these days as government pulls back grants to councils and all services have to be self funding. This will not change even if Labour get back in but what is the alternative? I hear complaints from decent landlords and agents about bad ones and I take on board what they say but nothing changes. There isnt any action from within the PRS community to change things so it has to be imposed from outside and if they decent ones get penalised for that it cant be helped.
Obviously introducing licensing and regulating will have adverse effects, no change anywhere in society comes without it’ downside but at the moment we have a massive national problem of criminal behaviour and poor property standards and government’s only solution to it is use existing legislation, which is unwieldy and impractical and even if succesful the penalities are paltry and no deterrent at all.
Yesterday inside Housing reported a landlord being given what they termed a ‘Hefty’ fine of £10,000 for running unlicensed HMOs. 20 Breaches amounts to £6 per property per week. I wouldnt call that hefty and he can still stay in business after the fine.
Ben, Tessa
I’m not convinced.
Rather than relying on “personally I think a system of landlord registration is more likely to deal with the problem of bad landlords” as a basis for a leap of faith into universal licensing can you point me to some evidence that general licensing will work?
We have had various versions of Licensing in place for well over 5 years now, so something should be out there.
Multiply £500 by the number of rented properties – 1.2m – and you can see why a leap of blind faith is not really appropriate for a scheme which would cost tenants half a billion each cycle.
I might be convinced if those designing our Licensing Schemes were showing a shred of competence, efficiency, practicality or professionalism, or even in some cases a slight willingness to obey the law, but it doesn’t seem to be happening.
Why does it cost Newham Council £25 to cash a cheque and £28 to check an address at the Land Registry, as published in the cost estimates passed in 2010 by Sir Robins Wales’ Cabinet?
Why after that did Sir Robin claim that licensing would cost £30 a year?
Why does it cost £500-£1000 to do a single landlord license in England, which is more than a full set of new household appliances for the tenant?
And why can Scotland do it for £50 per landlord plus £10 per property?
A licensing scheme *may* be useful, but I think we need to start by finding some evidence, then dump the 2004 Act and start again.
@John, @Ben
What is missing is any regulation on the level of fees which may be charged, or any incentive for Councils to be efficient.
Therefore we have Licensing schemes used to add all sorts of requirements (and the charges to administer them) on top.
So, for example, we had the recent attempt by Norwich to increase it’s HMO License from £270 to £1900.
The only current effective regulator of this seems to be High Court actions.
I suspect that part of the solution is competitive tendering.
ML
@ML This is the penultimate post in a series and for the explanations behind my reasoning here you need to see the earlier posts.
Obviously I am just a solicitor not a government minister and this is series is for discussion purposes only. Saying something here is not going to change the law.
However I do think something needs to be done – the private rented sector is now an important provider of housing – more so in many areas than social housing.
I don’t thing leaving it all to the local authorities is the answer – they will all come to different solutions and costs and this is unfair on landlords.
Yes, a national scheme may be fairly expensive but regulation is expensive – it is the price we pay for living in a civilised society.
And after all the cost will be spread over millions – the one billion you suggest is not going to be paid solely by one family living in a two bedroomed house in Chiswick.
I agree with you ML. The various costs levvied by councils are questionable in a sense but as I state above they are essential for councils to provide services these days. Localism Act allows council to generate income from pretty much anything they like now so it will only gets worse.
Look at the maths and the quandaries. Everyone complains about council tax. If a council raises it to maintain services the community they serve is in uproar. If they drop it they have to cut jobs and services and the community is in uproar again.
People have to pay if central government wont give councils the funding they did 30 years ago.
The real question is ‘What are you getting for your money?”
To my mind Newham’s problem is they dont seem to giving anything in return to landlrods. This is why Newham’s strategy seems to be alienating every single landlrod in the UK, not just their own local landlords and in the process are almost becoming a national symbol for landlord anger.
I think a council should be providing a brilliant service in return for the licensing fees, not just penalising and enforcing breaches. Councils have a lot to offer if they can change their minds and see their role as hands n, partnership PRS service providers, mentors and enablers